2011 • Volume 36 • Number 3

Examining Data Point in Minority Buy-Outs: a Practitioner’s Report

Suneela Jain, Ethan Klingsberg & Neil Whoriskey

The authors reviewed controlling stockholder/minority buyout transactions announced between January 1, 2006, and December 31, 2010, in which the controlling stockholder held more than 40% of the target company at the commencement of the transaction, the value paid for the minority stake was in excess of $50 million, and the transaction was successfully completed. This data shows that the Delaware Court of Chancery’s efforts to make progress toward a more efficient and coherent approach to judicial review of minority buy out transactions are having de minimis, if any, impact, and that market forces, rather than existing case law, are the participants’ primary drivers when deciding how to de’structure these types of transactions and how to respond to related litigation.